A source close to proceedings said the deal was “as good as done” although final contracts are still to be signed.
“Everyone was expecting Virgin Money to seal the deal and they are going to announce they have in the next few weeks,” the source revealed.
In June Virgin Money confirmed it had submitted a bid for Northern Rock’s “good” bank after the government announced plans to privatise the lender by the end of the year.
Earlier this month Mortgage Introducer reported if the Virgin Money bid was successful the Northern Rock brand was likely to be scrapped.
Last month Wilbur Ross, chairman and chief executive of WL Ross and the money behind the Virgin bid, told CNBC.com he was confident they would be successful given the extent of international investor support.
He also said Northern Rock had a “beaten-up name” compared to that of Virgin.
Ross has backed Virgin Money to the tune of £100m investment for organic growth and a further £500m for acquisitions and other investments.
A spokesman for Northern Rock said: “We cannot confirm or deny anything to do with the sale process or on individual parties who may be involved.”
Northern Rock was nationalised in February 2008 and then split into a “good bank” and a “bad bank” in January last year.
Virgin Money submitted a bid to rescue Northern Rock back in October 2007 before the bank was nationalised and then again in January 2010 when it approached private equity house Blackstone to provide backing.
The initial £1.5bn bid for Northern Rock in 2007 was part of a consortium that included US insurance group AIG, Wilbur Ross, hedge fund Toscafund and Hong Kong-based First Eastern Investment.
Before the government opted to nationalise the bank Virgin was the preferred bidder ahead of rival bidders JC Flowers, Olivant and Cerberus.
In the most recent round of bids National Australia Bank, Resolution and Paragon Group are all tipped to be interested in buying Northern Rock.
Coventry Building Society which was originally believed to have looked at buying the bank has since ruled itself out.
Virgin Money was unavailable for comment.
